COVID-19 disease is gradually proving to be a curse on the fashion industry. As the imposed lockdown forces retailers to stay shut, it seems that the prevention of the deadly disease will come with a huge cost.
Business of Fashion and McKinsey recently published a detailed report named “The State of Fashion 2020: Coronavirus Update”. It describes the present condition of the Luxury industry and predicts that it is going to suffer the after-effects of the lockdown longer than expected. Luxury retailers like Coco Chanel, Louis Vuitton, Prada, Gucci have survived major economic crises in the past but it seems like this time they can’t get through. As the report claims that the impact could be worse than the 2008 world economic crisis.
“In many ways, the coronavirus pandemic is the first global crisis that will deeply impact the sector since the industry morphed into a virtual oligopoly,” writes journalist Lauren Sherman in the report.
With the changes in consumer spending patterns, the tension at the luxury front is rising. As the consumers become more conscious of how they expend, luxury shopping might go out of their list.
While many experts predicted that luxury would be become more affordable compelled by the current scenario. Others comment that the affluent lifestyle of some people would contribute to their sales immensely. “Conspicuous consumption may be replaced with a demand for conscious, responsible luxury,” adds Abhay Gupta, founder, and CEO, Luxury Connect and Luxury Connect Business School. “However, for the hedonist consumer, luxury is a way of life, and the benchmarks of sophistication are unlikely to change. Public memory is short, and luxury will return to its true levels in due course.”
Predictions also say that the customers might also indulge in revenge- buying. Weeks of lockdown has created a panic among people. Therefore, to avert the impact they might want to resort to retail therapy. This prediction might be true as the famous luxury brand Hermes experienced a huge surge in sales post lockdown. It recorded sales worth $2.7 million on its first day after the lockdown in China. This news could become a great source of motivation for other luxury retailers. Contrary to what the report represents, it looks like the luxury industry might sustain its position in the market.